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Moody's expects more UK energy suppliers to fail as wholesale prices soar

·1-min read
FILE PHOTO: The sun rises behind electricity pylons near Chester

(Reuters) -Britain's retail energy sector will see more failures from suppliers and increased market consolidation due to a sharp rise in wholesale energy prices, rating agency Moody's said on Wednesday.

The sector faces pressures on profitability and an increased risk of credit negative political intervention, the agency added.

Nine British energy suppliers ceased trading last month alone. Smaller suppliers with less capital are struggling amid record wholesale power and gas prices across Britain and Europe, while price caps prevent the full rises from being passed on to consumers.

"More (failures) will follow with Renewable Obligation payments due in October," the agency said.

British ministers are also looking at a range of options to help companies such as National Grid Plc, Centrica Plc, EDF that have taken on a flood of customers from failed suppliers.

Profitability at those firms will be affected until higher prices are passed on to customers, Moody's said.

(Reporting by Aishwarya Nair in Bengaluru; Editing by Ramakrishnan M.)

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